The Working Group on Disinvestment Issues yesterday stated that the government had not been pursuing the disinvestment programme for public sector enterprises (PSEs) in all sincerity.
The group accused the government of disposing of profitable company's assests at values much lower than the market prices. It said the government was not making efforts to dispose of the loss making units.
The government suffers a net loss of 50 per cent by selling off profitable public sector units, the group said.
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It also felt that announcing disinvestment targets was not a good strategy. The uncertainty about the future of the company affected the share value as well as performance of the company. Also, the net value of the assets is eroded.
One of the members of the Working Group C P Chandrashekhar, who is associated with the Jawahar Lal Nehru University, said a completely different evaluation strategy should be adopted for the PSEs as market value of the shares of a particular company would depend on the prevailing market conditions.
He added that these earnings were currently being used to close the fiscal deficit. Chandrashekhar said that the government could not reduce fiscal deficit by selling shares of profitable PSUs at throw away price. The right way to cover the fiscal deficit, according to him, would be to raise the tax-GDP ratio.
The group highlighted the employees' alternative as a part of Indian Petrochemicals Corporation Ltd (IPCL) restructuring. Employees intention to take over government stake in IPCL through their accumulated funds and promote their company as Stock Holding Company of IPCL(SHCIL) was one of the options suggested for IPCL restructuring.